Steps to mathematically calculate your Income Tax

Step 2: Determine your Charity/Donation amount (if any)
Donations here refer to the amount contributed to any organization(s) in the form of charity, which should be in compliance with the Income Tax Regulations.

Step 3: Work Out your Savings
It takes into consideration all your savings and investments that are included in the sections under Income Tax Rebates.

Step 5: Figuring Out the Income Tax
Now that you have determined your taxable income, you may consult the Income Tax Slab for working out the income tax.

Step 6: Include Surcharge
You need to include a surcharge of 10% of your yearly income to the amount of income tax that you have figured out in the previous step. This will be the amount of your new income tax. (N.B: This step is not relevant if the yearly income is less than Rs. 10 lakhs.)

Step 7: Include the Education Cess
You need to add 3% of your taxable earnings (as education cess) with the new income tax amount that you have figured out in Step 6 mentioned above.

Income Tax Monthly Sheet 2015-16

Download sheet from the below link and manage your monthly expenses, earning and savings to calculate final taxable income and income tax for the year 2012 - 2012

How to Calculate Taxes on Your Own

Taxpayers can use the sheet to compute the taxes on their own. Following are some steps with which they can use the sheet:

Fill in the amounts for the first category of payments like the Basic and HRA

Then fill up the "Other Payments" and "Pre-requisites or Others" sections if you receive such payment. Once filled up the aggregate amount will represent the your overall income

Now comes the part of finding out how much can be exempted from taxes. For this you will need to put in the applicable figures for your housing loan interest or loss from residential property. (In case you are eligible for any of the above mentioned tax exemptions granted under Section 80C, 80D, 80U or 80E you can also include the amount to calculate your taxable income.)

Now, with regards to determining the applicable income tax amount the basic tax to be imposed on salary needs to be mentioned in the columns. Tax payers can also fill in the other taxes like PRV employer tax and referral claim.

Detailed Explanation of Income Tax Calculation Sheet

As per the income tax form for the 2015-16 fiscal the following factors will be taken into consideration while deciding the gross salary of a taxable employee:

Basic

Special allowance

HRA

City compensatory allowance

Exemption of HRA under Section 10/13A

Referral allowance

Transport allowance

Arrears of the previous year/s

Exemption of transport allowance under Section 10/14

The areas mentioned below are the "other payments" and liable to be subjected to taxes:

AIP/SIP/PIP/V.Pay

Notice pay recovery or reimbursement

Referral claim

Tour

Taxable reimbursement

LTA

Leave encashment

The following are regarded as "prerequisites" or "others" in the 2014-15 income tax form:

Company leased accommodation

Payment for sweeper, watchman, and gardener

Less paid by the employee

Car perks

Medical reimbursement

Hard furnishing

Interest free loans

Normally the tax on these categories is deducted while calculating the salary.

The following factors are also considered while paying the salaries of taxable employees:

Loans from housing property

Interest of housing loan

Determining Taxable Income As Per 2015-16 Guidelines

The income tax form for 2015-16 fiscal states that the following investments will be regarded as exempted from taxation as per the Section 80C of the Indian Income Tax Act:

Premium of life insurance

Mutual funds

Unit Linked Insurance Plans

Fixed deposit postal deposit schemes with tenures of 5 years each

National Savings Certificates

Pension plans

Public Provident Fund

Tuition fees

Principal of housing loans

Fixed deposits

The employee's contribution to the provident fund is normally deducted from his or her salary. The following deductions are also available to an employee as per the rules of the Indian Income Tax Act:

Mediclaim expenses for self as per Section 80D

Interest paid for education loans as per Section 80E

Mediclaim expenses for parents as per Section 80D

Taxes Deductible As Per 2015-16 Income Tax Form

The following taxes are deducted from an employee's salary according to the 2015-16 tax form:

PRV employer tax

Leave Encashment

AIP/PIP/SIP

Notice Pay Reimbursement

Referral Claim

Tour Advance

Taxable Reimbursement

LTS

In case of employees living in Delhi, Kolkata, Mumbai, and Chennai the tax exemption provided as per the Section 10/13A will be the minimum of the following categories:

Actually received HRA

50 percent of salary

The rent paid more than 10 percent of the salary

If the employees are not staying in any of the above mentioned cities then the tax exemption available as per the Section 10/13A will be the minimum of the following categories:

Actually received HRA

40 percent of salary

The rent paid more than 10 percent of the salary

Leave Encashments in Income Tax
According to the tax form for 2015-16 fiscal the taxable amount of leave encashment is calculated taking into account the following factors:

Basic salary

Number of days

Actual amount

The upper limit of exemption in this case, as per the Income Tax Act, is INR 300,000

Average salary of 10 months

Cash equivalent of leaves at the time of retirement

Exemption

Calculation of Gratuity

While calculating the taxable gratuity, the 2015-16 income tax form, makes it clear that the following categories will be considered:

Basic salary

Number of years in service

Actual amount received (salary of 15 days for every year; in case of fragmented service a period of 6 months will be taken into account)

The maximum exemption in this case is INR 10 lakhs

Computation of Taxes in Income Tax Calculator

The process of computation of taxes is done by first taking into account the above mentioned payment components such as basic, HRA, and special allowance. Then the "other payments" like referral claim and taxable reimbursements as well as "pre-requisites and others" are taken into account.

The various tax exemptions for which an employee is eligible are also considered in these calculations. While calculating the taxes, the taxes on salary and taxes on others like the provisional taxes are taken into account.

2015-16 Income Tax Slabs

Income Tax Slabs for 2012-13

As per the budget for 2012-13 fiscal the exemption limit for individual income tax payers has been increased to INR 2 lakhs. The tax rates for the various slabs have been changed too.

Tax slabs for men: In case of general tax payers earning between INR 2 lakh and 1 rupee and INR 5 lakhs need to pay a tax of 10 percent. For people earning between 500001 and 1000000 the tax rate is 20 percent. In case somebody is earning more than 10 lakh rupees a year he or she will need to pay 30 percent tax.

Tax slabs for women: Women tax payers earning less than or equal to INR 2 lakhs a month will be exempted from taxes. For women who are earning within INR 200001 and INR 500000 the applicable tax rate is 10 percent. In case their earnings for a year are between INR 500001 and INR 1000000 they will have to pay 20% tax on the same. If their yearly income exceeds 10 lakhs the tax rate will go up to 30 percent.

Tax slabs for senior citizens: In order to be considered as a senior citizen a tax payer should be within the 65 to 80 years age group. For them the tax exemption limit is INR 2.5 lakhs a year. If their yearly income is between 250001 and 500000 the applicable tax rate is 10 percent. The tax rate is doubled if their yearly income is within 500001 and 1000000 rupees. If the total income for a year is more than INR 1000000 then a tax rate of 30% is applied.

Tax slabs for very senior citizens: For purposes of taxation, tax payers older than 80 years are classified as very senior citizens. They are exempted from income taxes if their yearly income is lesser than INR 5 lakhs. If their annual earnings are between 500001 and 100000 the applicable tax rate is 20 percent. The tax rate increases by another 10 percent if their income is more than that.

The Union Finance Minister has made several proposals for changes in the rates of income tax slabs:

From now on an additional tax exemption of INR 50 thousand will be provided in case of investments in retail equity. However, this facility will only be applicable if yearly income is less than INR 10 lakh. The program has been named Rajiv Gandhi Equity Scheme

An additional deduction of INR 5000 for precautionary health check-up will be provided from now on - medical insurance will not be included in this case

Income Tax Slabs for 2011-12

Tax slabs for men: in 2011-12 the tax exemption limit for men was INR 180,000. Between INR 180,001 and INR 500,000 the applicable tax rate was 10 percent and between 500,001 and 800,000 a tax rate of 20% was applied. The tax rate was 30% for any annual income that was more than INR 8 lakhs.

Tax slabs for women: The tax exemption limit for women in 2011-12 was INR 190,000 a year. In case their annual income was anywhere between INR 190,000 and 500,000 a tax rate of 10 percent was applied. A tax rate of 20% was applied in case of yearly earnings between 500,001 and 800,000 rupees. In case the annual income exceeded INR 800,000 a tax rate of 30% was levied.

Tax slabs for senior citizens: For senior citizens the tax exemption limit in 2011-12 fiscal was INR 250,000. In case their annual income was between INR 250,001 and INR 500,000 a tax rate of 10% was levied. For annual incomes between 500,001 and 800,000 rupees the tax rate was 20% and for any amount more than that the rate was 30%.

Income Tax Slabs for 2010-11

Tax slabs for men: in 2010-11 the tax exemption limit for men was INR 160,000. Within INR 160,001 and INR 500,000 a tax rate of 10 percent was applied and for an amount between 500,001 and 800,000 the applicable tax rate was 20%. The tax rate went up to 30% for any annual income that was in excess of INR 8 lakhs.

Tax slabs for women: The upper limit of tax exemption for women in 2010-11 was INR 190,000 a year. If their annual income was in the range of INR 190,000 and 500,000 a tax rate of 10 percent was considered applicable. A tax rate of 20% was used if their yearly earnings were between 500,001 and 800,000 rupees. In case the annual income was more than INR 800,000 a tax rate of 30% was imposed.

Tax slabs for senior citizens: In 2010-11 fiscal tax payers who were 65 years and older were regarded as senior citizens and there was no category for very senior citizens as such. For senior citizens the maximum limit of tax exemption was INR 240,000. If their annual income was anywhere between INR 240,001 and INR 500,000 a tax rate of 10% was levied. For an annual income between 500,001 and 800,000 rupees the tax rate was 20% and for an amount more INR 800,000 a year a rate of 30% was applied.

How to File Tax Returns?

As per rules, salaried tax payers need to submit their income tax files by July 31 in an assessment year if the Income Tax Department of India does not grant an extension.

The tax payers need to get the relevant tax form from the ones mentioned above and then register them along with the relevant documents at the income tax office or a special counter.

These details are normally available at the official website of the Income Tax Department. They are also supposed to provide their PAN numbers when they are filing their tax return.

As per the Electronic Furnishing of Return of Income Scheme 2004 qualified tax payers can register their tax returns through the internet. This process can be executed with certified e-return agents.

The agents normally digitize the data and then transmit them to the Income Tax Department's e-filing server using their digital signatures.

Income Tax Return Forms 2015-16

The income tax return forms can be downloaded from the following address:
http://www.incometaxindia.gov.in/download_all.asp